Unknown: Music.
WW: Welcome back to the Unlimited Hangout podcast, I'm
your host, Whitney Webb, contributing editor at
UnlimitedHangout.com and today I have a co host. Mark Goodwin,
author of the book The Bitcoin Dollar and Unlimited Hangout.
Contributor, Hi Mark.
MG: Hello Whitney. Thanks so much for having me, of course.
WW: So while most people have probably heard of Blackrock, the
world's largest asset manager, run by Larry Fink, it seems like
relatively few people are aware that Blackrock has also played a
pivotal role in the largest institutional theft of American
wealth in the history of the country, and unfortunately for
us, it seems that the final phase of this now decades long,
process of theft is quickly approaching, enabled in part, by
the media manufactured ignorance of one of the greatest financial
crimes ever in this episode of Unlimited Hangout we hope to
help dispel some of that ignorance with the 2008 economic
crisis. The unusual relationship between the Federal Reserve and
BlackRock began with Blackrock becoming a government contractor
and informal quote, unquote advisor to the Treasury
Department. At the time, concerns were raised at this new
role in the public sector for Blackrock would imperil
taxpayers. As the asset manager was likely to place its main
driver, generating profit for its private sector shareholders
over positive outcomes for the public and the Treasury, even
when those concerns were proven right just a few years after the
crash. That didn't stop the government from again turning to
Blackrock during the next major downturn after 2008 that
downturn, while often framed as beginning with the declaration
of covid 19, as a global pandemic in March 2020. Had
really begun months earlier in September of the previous year,
when the repo market went haywire, forcing the Federal
Reserve System to intervene. The Fed's intervention, little did
the public know had been conveniently designed by
Blackrock not long before the repo market started to go crazy.
That Blackrock design policy, known as going direct, would
begin well before covid, but would use the pandemic as cover
to execute the largest wealth transfer in our nation's
history. Yet very few Americans are aware of the scale of this
more recent theft, particularly because the media, including
much of the independent media that railed against covid era,
policies, either declined to cover the story or remains
unaware it even happened with major politicians now claiming a
major US debt crisis is on the horizon. Today, we turn to the
person who broke the going direct story, John Titus, to
explain what Blackrock has done and what it will likely do
during this apparently anticipated next downturn. We
will also discuss the manufactured bank consolidation
wave that began with the collapse of Silicon Valley Bank,
and how Blackrock covid era antics have enabled that,
revealing how many of the economic calamities of the last
few years were intentionally created by those who
successfully sought to consolidate control over both
the financial services industry and the public sector entities
that ostensibly regulate them. John Titus is the founder of the
best evidence video channel found on YouTube and other
platforms. He is also a frequent contributor to Catherine Austin
Fitts Solari report, where he co hosts the money and markets
podcast. Also, as I alluded to a moment ago, he is the original
author of the expose that revealed the Blackrock designed
going direct policy during the covid 19 crisis. And has also
forensically exposed a variety of financial crimes committed by
Wall Street and the Fed, often in tandem over the past several
years. Welcome back to unlimited Hangout, John. It's great to
have you today.
JT: Great to be back. Whitney,
WW: wonderful. So while Blackrock is a pretty well known
name these days, I feel that many still are unaware of what
they actually do and the power they actually wield,
particularly as it relates to their relationship with and
their influence over the government. So would you mind
giving a brief overview of what Blackrock is, why it matters,
and its relationship with us, fiscal policy, before we drill
into the specifics?
JT: Yeah, let me, let me say one thing, I didn't really break the
story. I think the person who actually broke it was Pam
Martins of WallStreetonparade.com, what I
did was was, was explain the connection between Blackrock
paper dealing with the next downturn in 2019 and what
subsequently happened both on the Fed's balance sheet and on
banks balance sheets, and that's something that I was out there
alone doing, because so many financial commentators and so
many monetary commentators insist to this day that
quantitative easing is merely an asset swap, meaning it stays in
the banking system at the wholesale level when that fact
is incorrect and has been refuted by the Federal Reserve
itself, and it was refuted in the wake of the pandemic.
Anyway, we can get into that when the time comes. Let's talk
about BlackRock. Though BlackRock, like you say, is the
world's largest asset manager, to be clear, they are. A bank,
they're a financial institution. They're they're those two
entities are different. Banks are materially different than
non banks. Non banks are include you and me. When we lend $20 we
reach into our pocket, we pull the $20 bill out, we are
dispossessed of that money when we lend it, we kind of kind of
lend on the piggy bank model. Banks don't do that. When a bank
lends $20 whether it's a commercial bank like Bank of
America, or a wholesale bank or a central bank like the Federal
Reserve, they don't they don't reach into their pocket to get
the money. They create that money out of thin air and lend
it out against an asset, and that is where Blackrock comes
in. So BlackRock, technically, yeah, they were involved with
the Treasury in 2008 but their real role in the pandemic, when,
when they when Blackrock went big time, was when the Fed
created out of thin air, and immediately, as soon as the
pandemic began, the Fed basically ginned up $5 trillion
of reserves out of thin air and bought assets. And when they did
this in early 2020, through the next six or eight weeks, the Fed
bought assets from non banks, and that was new during the
global financial crisis. 2008 2009 the Fed, pretty much was
bailing out banks, and it was buying assets from banks, not
from non banks, but in 2020 it started buying all these assets
from from non banks, and that was Blackrock's plan. So So in
August of 2019 at the biggest Federal Reserve conference of
the year in Jackson Hole Wyoming, which is hosted by the
Kansas City Fed. BlackRock has a paper called dealing with the
next downturn, and in that paper, Blackrock says, hey, you
know what? There's going to be another downturn, and when there
is Federal Reserve, you're going to need to buy assets from non
banks, which is a departure from what the Fed did during the
global financial crisis of oh 809, because you're going to
need to inject money, helicopter money, they called it into the
commercial banking system, and lo And behold, a month later,
the New York the overnight repo market in New York begins to
melt down. The New York Fed intervenes. It begins buying
assets from non banks, and that continues through January of
2020 up through March 2020 of course, in March of 2020 around
March 10, the World Health Organization declares a
worldwide pandemic, and the Fed immediately goes nuts and says,
You know what, we gotta, we gotta buy all these assets. Now,
what the Fed did not say when they made the announcement in
connection with the pandemic was, we're gonna, we're buying
the asset from non banks. But that's what they did. And you
can see that very clearly. I've made video after video after
video of that showing that the Fed was buying money, buying
assets from non banks, which had the effect of for every dollar
the Fed bought in assets, it also increased by $1 the amount
of money in the commercial banking system going into the
pandemic. If you added up all the checking and savings
accounts in the US, the commercial deposits, there was
13 and a half trillion, when it was all said and done, topped
out at $18 trillion that was the Fed's asset purchase program,
and that was managed by BlackRock. BlackRock was brought
in by the Fed to manage the purchase of assets. The Fed
signed a waiver saying, oh, you know, it's no problem. You can
actually buy BlackRock. You can, you can order us to buy your own
assets. Isn't that great. So you, you're buying assets that
you own with, with, with money that we created. A thin air. You
buy your own assets. What a sweet our deal. And no problem,
because we're signing a, you know, a legal waiver to let you
do that. So it really wasn't like a theft in terms of, it was
a bank robbery with a gun to people's heads. It was really
along the lines of Blackrock had big time insider knowledge and
leveraged the living be Jesus out
MG: of it, and, and, you know, very conveniently, you know,
they crushed demand by basically locking everybody in their house
for, you know, a year and a half or whatever, as they're, you
know, massively expanding the monetary supply and commercial
banks. I don't know if maybe how much econ 101, we want to do
here, but you've done some really amazing work on, kind of
breaking down, you know, very simply, the the two tiered
system of reserves and of money, of retail facing money. And I
think when you talk about the repo market, it might, it might
be helpful for listeners that are maybe coming in from, you
know, knowing things are messed up, but don't exactly know the
mechanisms. Here, it might make sense to do a brief overview on,
you know, the creation of reserves and how private
capital, you know, money creation is sort of. Innately,
this private, public partnership. And you know how
the Fed and Treasury make reserves, commercial banks make
money, and then what the repo market actually is, and why the
repo market exploding in September, you know, six months
before lockdowns. You know why that's that's sort of important.
So is that? Is that too broad of a question here? But did you
mind just kind of going over, yeah, take it away.
JT: The repo market is is less the legal the repo market
triggered the crisis, for sure, but it's less important. The
amount of asset purchases done in that market was about $400
billion which, at the time, seemed like a big deal, but it
ultimately paled in comparison, right? So the repo market is
complicated because the Fed to to maintain a level of opacity
so that you can never know who they're buying those assets
from. The Fed buys assets from primary dealers, and so you so
if you went to the Fed, even if you could go to the New York
Fed, say, who'd you buy the asset from? They're going to
give you a list of 24 primary dealers, and that's not really
who they bought the assets from. Um, anyway, let's talk about,
let's, let's talk about the two tier system, because that's the
more important component, and that's what distinguishes
pandemic quantitative easing, what the Fed did during the
pandemic, from what it did during the during the global
financial crisis. The global financial crisis, banks were in
trouble. Okay, all the banks, I don't care. I don't care what JP
Morgan says. JP Morgan was as dead broke as the rest of them.
That whole notion is just a lie. Jamie Dimon is actually the
first video I ever made was October 5, 2013 called bankster
baseball, where I show that JP Morgan was just as broken. Jamie
Diamond's line of Congress, they were all broke the banks. And so
what the Fed did then was they bought assets from banks. And
when do you do that? Banks don't use checking and savings account
like you do. They have special tokens with the Fed. You and I,
bank at commercial banks. Banks don't do that. Banks, Bank at
the Fed. The Fed is the bank's bank, and the Fed to help people
do their banking with the Fed. They don't use like checking
savings accounts. They use reserves. They just consider
reserves like tokens. And so when the Fed was buying assets
from JP Morgan and Citigroup, what the Fed was do was create,
say, a billion dollars of these tokens, these reserves out of
thin air, give them to the banks. Give them to JP Morgan
Chase or Bank of America, and in exchange, the banks would hand
over an asset to and mostly it was two thirds. Roughly it was
two thirds treasuries and 1/3 mortgage backed securities. And
that made the banks liquid. Okay, because there wasn't a lot
of asset trading at that time. That was one of the problems was
that the markets had seized up. Everything was liquid. Well,
reserves are highly liquid, but that swap there of reserves for
assets stays within the banking with within the banking system.
At the wholesale level, there's no effect of that transaction at
the on the commercial deposit level, your bank account doesn't
go up, my banking account doesn't go up. There's no the
money supply at that retail level is unaffected by the Fed's
purchase of an asset from a bank, okay? But now you go to
the pandemic, and the Fed is no longer it's not buying assets
from banks. Banks aren't the ones in trouble, like you said,
Mark, it's really, in theory, it's businesses that are in
trouble because they're being shut down in practice, not so
much. But the point either way is in 2020, the Fed begins
buying assets, not from Citigroup, but from non bank,
institutions like, say, Tesla, you know, big, big or or from
hedge funds, that would be another non bank, financial
institution. And when you do that, when the Fed does that,
because say, let's just call let's just say, I use Tesla as
an example. Even though I don't, I have no way of knowing whether
they bought assets from Tesla. I'll use Tesla as an example.
Tesla does not have an account at the Fed. Okay, so, so how
does the Fed go to Tesla and buy an asset? Tesla doesn't have an
account at the Fed. They can't accept they can't the tokens
don't mean anything to the Tesla. They're like, Chuck E
Cheese tokens. The Tesla's like, what? What is this? So the way
that transaction works is, no, seriously, that's, that's, they
don't have an account of the Fed,
WW: the rules. No, I know. I just think the analogy is funny.
Well, it's kind
JT: of what went on. So the way the transaction work is, works
is the Fed goes to Tesla's bank, okay? And so, so. Say Tesla
banks at it's on the West Coast. It banks at Wells Fargo. So the
Fed to buy an asset from Elon Musk says, okay, the way this is
going to work is we're going to, we're going to deposit a billion
dollars of reserves at Wells Fargo. Okay, that's an asset on
Wells Fargo balance sheet. Now Wells Fargo needs a
corresponding liability on its balance sheet, because balance
sheets need to drum roll balance out. And so when that liability
is created at Wells Fargo, it takes the form of a $1 billion
credit to Elon Musk's bank account or his checking account
at Wells Fargo. And now everything balances out. Elon
Musk got rid of his $1 billion asset in exchange, he now has a
billion new dollars in his Wells Fargo account. So Elon's all
checked out. He's all squared up. Wells Fargo is squared up
because it's got a billion dollars of new reserves on one
side of his balance sheet, the asset side, it has $1 billion of
liabilities in the form of a new $1 billion credit in Elon Musk
checking account. On the liability side, and the Fed's
balanced out because it's got whatever a billion dollar asset
it got from Elon Musk, which is in the custodian of which is
BlackRock, and it's got a billion dollars of liabilities,
called $1 billion of reserves. So every it's a three way
transaction, and that is the essence of pandemic. QE, I
wrote, I did video after video of it. And finally, the Fed
wrote a paper saying, yeah, that's, that's, that's how
things work when we buy assets from a non bank, and that's what
went on, and that's, that's what drove, as I say, the bank, the
money supply in the banking system from 13 and a half
trillion to $18 trillion that's where your inflation came from.
All these other bogeymen they point to nonsense. It came from
buying assets from non banks. And Mervyn King, the former head
of the Bank of England, threw the Fed under the bus and said,
Yep, that's the Fed's fault for buying assets from non banks.
Wow, interesting. And that that's, that's what you need to
know. Because what it means is, if it's for, insofar as
Blackrock is concerned, it means, okay, well, they're
managing a ton of assets, and we don't know how many, but
they're, you can rest assured, the world's largest asset
manager was brought in because they're going to be managing,
you know, pretty much the world's largest QE program ever.
Number one, number two, as I said, they fed signed a waiver
allowing Blackrock to take both sides of a trade. So what's to
prevent Blackrock from investing in Tesla? Right before they go
and plunk, you know, a billion dollars in the Tesla stock
answered nothing blocked them to do that. You know, there's the
conflicts of interest bound up in this are just amazing. But
yet it went forward with very little scrutiny or, and I must
say, very little understanding by people who write about
financial matters. That's what, that's what got me stop saying
this is just, they're stop saying this an asset swap.
That's that's the answer that you would say every time, like,
well, there's not gonna be inflation. It's just an asset
swap at the wholesale level. It's like, No, it's not an asset
swap. It's a third, three way transaction involving a non bank
entity that has the effect of mirror, mirroring and
replicating the creation of reserves. So if you create a new
a billion dollars of new reserves to do an asset purchase
from a non bank, you are, by definition and necessarily, also
creating, in parallel, $1 billion of new bank money in the
banking system. So stop saying it's merely an asset swap. And
yet to this day, I see renowned financial writers parroting that
very line, and it's completely false, and the Fed says it's
false. It's unbelievable. Yeah,
MG: there's also, I mean, I think you sort of exposed this
as well. Is that not only were they, were they buying, you
know, assets from non bank entities, and there's this
obvious, you know, conflict of interest, but even managers like
Blackrock were buying their own ETFs within this program. And I
think that maybe would be a good opportunity to kind of talk
about, maybe, like, what an ETF even is, and why this is sort of
dominated, you know, since oh eight, when Blackrock actually
bought the iShares brand from Barclays after they denied a
government bailout, you know. Now, you know, the ETF is kind
of like the most popular vehicle for investment, because it's
such a it's such a great opportunity for these managers
to basically just index and just create a pricing mechanism and
then sell, you know, shares of something that they don't
actually have to really do too much underlying work for. So,
yeah. So, so why has the ETF kind of exploded? We can get
into bitcoin stuff and whatever, but, but really, Blackrock went
from, you know, not, not messing with ETFs at all, you know, and,
oh, wait, to now being the largest ETF manager in the
world. And I think the ETF mechanism plays into some of
this stuff. So maybe just kind of overview it, yeah.
JT: In my opinion, the ETFs have exploded. They're an easy it's
an easy way for Joe Schmo to get into the stock market, because
he sold on a couple he's like, Well, it's secure, it's safe.
It's indexed. It's across a bunch of it's a bunch of
different companies. You don't to worry about a thing. And it's
managed by Larry Fink, and he's a genius. So you just give us
your money and we'll spread it across a bunch of markets, in a,
you know, in the electronic car, ETF, or whatever it is. And so
it really is expanded the participation of retail money in
the stock market. But notice that it's, it's being managed by
professional money managers like BlackRock. And so it has the
effect of it to me, it's, it's really a control mechanism more
than anything else, because if you look at, if you go to the
10k filings that every, or even 10 Q filings, but certainly the
10k filings of companies that are traded on the stock
exchange, you know, every, every year, they have To make file
annual report with the Securities and Exchange
Commission, and one of the parts of the annual report is called
proxy statement, which includes a statement of beneficial
owners. And so you can go company by company, by company
by company, and see who wants this company and to what degree.
And when you do that, I don't care what the company is. If
it's a company of any size at all, you're going to see the
same names again and again and again. The names are BlackRock,
fidelity, State Street. There's all these big asset you know,
state Street's a bank, but they're they're kind of weird,
but they're a bunch of different companies, but they're asset
managers, and so if you think about that, if you have and the
numbers that are typical, the numbers you typically see, even
with huge companies, and so far as their ownership is concerned,
are 789, percent right around there. And you you know, okay,
well, this company, that's a lot of leverage to have over a
publicly traded company. I mean, if you own 9% of the company,
and realistically, you gotta peel back another layer, like,
well, who owns BlackRock, who owns the company? It's, you
know, you can only peel that onion back so far. But even at
9% that's an enormous amount of control over a company, because
you can threaten, we'll dump your stock and tank your stock
price and destroy your bonus, you know, overnight, and it's
this. And when you talk about a cabal of companies, just take,
you know BlackRock, you know fidelity, and a couple others.
Those, those asset managers, own easily, north of a third of the
company. So it's really, to me, it's a control mechanism that's
those companies need to get in line because a, a company like
Blackrock can dump the stock, and B because a company like
Blackrock is in bed with the Federal Reserve, which is
setting monetary policy. So it to me, the ETFs are part and
parcel of a larger control system in the US financial
system.
WW: Well, something else you've written about in relation to
the, I guess, downstream effects of going direct is the creation
of these killer whale account you've called them. So can you
explain what those killer whale accounts are, how going direct
helped create them, and their role, as you investigated, in
the collapse of Silicon Valley Bank. And you know that the
regional banking crisis of that of that time, the going
JT: direct reset didn't contribute to the going direct
reset created those killer whale accounts. Okay, so let me talk
about what a killer whale account is. To me, a killer
whale account is any it's a bank account that's so big that its
departure from the bank threatens the bank, and they
were created during a going direct reset. So let me go back
to my Elon Musk's example. Let me, let me change the name of
Elon Musk, though, to a more realistic name. And the name is
Peter Thiel. But Peter Thiel destroyed Silicon Valley Bank
period, full stop. That's Peter thiel's baby. He did that? Heath
moved all of his money and all of his company's money out of
Silicon Valley Bank, and it destroyed that bank. The
testimony on the record is that $13 billion moved out of 10
accounts in Silicon Valley Bank in six hours. That's Peter
Thiel. He wrecked that bank. $42 billion moved out of that bank
in a day, and that's what wiped the bank out. Now, how is that
possible? How can that much money that never happened during
the during the global financial crisis? You know, it took two
weeks to move something like $16 billion out of, you know, one of
those west coast. Banks. And that was, that was the worst
one, but two weeks versus six hours. And the answer is, it was
enabled by the killer whale accounts. Because when the Fed
comes, like I said, back to the billion dollar example, when the
Fed comes to Peter Thiel or Palantir and says, Hey, you know
what? We want to buy an asset from you. You've got a you've
got a billion dollar Treasury there, we're going to buy that
from you. And Palantir is like, well, we can't accept reserves.
We don't take those stupid tokens. Well, you know, we back
with Wells Fargo, and the Fed goes to Wells Fargo, and they
give them the money. Well, now Palantir has a new billion
dollar account at Wells Fargo in the commercial banking system.
That's a lot of money. And normally, in a normal situation,
people don't hold on to bank accounts that big because
they're uninsured. Only $250,000 of that is insured in the bank.
So what do you do? Well, the whole, the whole thing you do is
you, you put it in the treasury market, because treasury, you
know, it's the government and it's not insured either, but if
the government goes belly up, you've got much bigger problems
than your assets. So that's that's people that people don't
keep that much money in the bank because it is uninsured and
because they're not getting an interest rate on it. So what
happens is, all these people are out there with these billion
dollar accounts, and north of a billion dollars, it's like,
well, I don't why are they maintaining these accounts? I
mean, I could see somebody keeping a billion dollars in a
bank for, you know, a week or a month or whatever, until they
get their ducks in a row. But that's not what happened these
companies like Palantir or Peter Thiel, they left it in the bank
for a long time, and then they transfer it out all of a sudden.
And when a bank, when you transfer money out of a bank,
you know it's a liability to the bank. And so it would seem like
that's a good deal for the bank. The deposits leave liabilities
leaving but that's not the way it works, because when they when
they send out of liability to another bank, they need to send
a corresponding asset, and the corresponding asset is reserves.
So deposits leaving is a big problem because, yeah, it's
gonna, it's gonna drain your your your liability side by a
billion dollars, and somebody transfers that much money, but
it's gonna drain your asset side too. And that's the problem.
That's what. Why? Because people don't keep that money. They keep
they keep assets on hand, in theory, balancing out their
liabilities. But in practice, a lot of those assets on the asset
side of a bank's balance sheet are illiquid. They don't move
that fast, and so the sudden departure of a lot of money can
send a bank like Silicon Valley belly up, and that's exactly
what happened. But Peter Thiel did that, and that entire thing
was enabled by pandemic QE, by the New York Federal Reserve,
that that's exactly how that crisis happened. And no one
talked about that, despite the crystal clarity of the
Congressional Record on that point. I mean Mark Warner and of
Virginia, senator from Virginia, and he said, Yeah, the record
shows that $13 billion left that bank from 10 bank accounts in
six hours. How does that happen? That happens because of QE,
because the Fed was buying assets for non banks. That's how
that worked. Yeah. It's
WW: interesting when you consider things too, like Peter
Thiel being CIA contractor, and some of the other unusual kind
of intelligence links and some of these other financial crises.
So for example, you know, Mark and I are hopefully working on
something that will encompass some of the stuff that happened
in oh eight, and some of the things that we found there I've
been kind of surprising. So, you know, when I was doing a lot of
my work on Epstein a few years ago, you know, I came across the
fact that he is essentially the pin that popped Bear Stearns. He
pulled a bunch of money out, in sort of killer whale fashion,
out of one of Bear Stearns, like most over leveraged funds,
knowing that it would go over if he under, if he did so. And of
course, he has intelligence affiliations. And then shortly
thereafter, I found out that the head of sovereign risk at Lehman
Brothers at the time of the oh eight crash, and when Lehman
went under, had been a top figure at the CIA just like a
year or two prior. Her name was Jeannie misick, and I think now
she's like, one of the top people the Council on Foreign
Relations. So, you know, it kind of makes you wonder when, when
one considers, sort of like the well documented overlap between
Wall Street and the intelligence services and things like that.
If you know, maybe there's other forces sort of prompting, what
ultimately are these bank consolidation waves and things
like that, which is, ultimately, you know, what the result of,
one of the main results of, oh eight was, I think that's
exactly right, yeah. And then, of course, the regional banking
crisis. So yeah. Do you have any thoughts on that?
JT: Well, first of all, that's a misnomer. The regional. Banking
crisis. Sure, the banks that went down. I mean, these, they
were all top 50 banks in the US. They were, they were massive
banks. They all had $200 billion in assets or more. They were all
in the top 50, if not the top 30. They were huge banks. So
that was, that was that that's a, that's a mainstream media
misnomer to get you off the cent those banks. That was a complete
takedown of those banks. And they were big time banks. So
regional bank is a bank like it only operates in Mississippi.
Sure. You know, Silicon Valley Bank is all over. But as far as
the connections to intelligence, I look at it, those are
interesting connections, both Epstein and Lehman Brothers.
Lehman Brothers story there, and this is pretty much borne out by
the record too. The Fed, they could have bailed out Lehman
Brothers, but chose not to that was that was a hit, that was a
grudge that Hank Paulson had against Dick Fuld. It's pretty
well known that that was just a grudge match there. The Fed
could have bailed that out that that story that they didn't have
legal authority is absolutely ridiculous. Um, but the
significance of the intelligence in any kind of military is that
the banking, the central bank in the US, to my way of thinking,
the central bank, modern central banks, really, since 1694 have
been top dog in every country they're in, and the reason for
that is that you know the money issuance, it's, it's, it's the
primal sovereign power, over and above military power, because
you need the money to prosecute the war, And it keeps everybody
happy, because a war is a big project, and it requires a lot
of money. It requires a lot more debt in a debt based monetary
system. So the bankers are the lead guys. You know, if you
researched Epstein, I've looked at hundreds of pictures of
Epstein, how many central bankers do you find in the
photographs of people around Jeffrey Epstein? Zero? Why?
Because Jeffrey Epstein's, he's, he's a control operation. He's a
blackmail operation. That's why, and the Fed knows better than to
get involved with that guy. You see treasury secretaries. You
see Larry Summers there. You see Bill Gates. Do you see any do
you see Tim Geithner there? Do you see? Do you see? Do you see
Bill Dudley there, or Ben Bernanke or Donald Cohen? No,
you don't see those guys. They're smarter than that. They
know better. They've been warded off of that. To me, the central
banks are the dog and everything else is the tail. So when the
central banks need policy implemented, they'll go through
the military, they'll go through the intelligence agencies, but
they're the ones calling the shots. Don't kid yourself about
that. I mean to me the significance of Epstein and all
this he might have been around during the Bear Stearns thing.
Bear Stearns was, for sure a hit and for sure a takedown. But to
me, when I look at Epstein, i i look back to one event that
happened, and we've already talked about it, and that's the
passage of TARP. Because on September 29 four days before
tarp passes, it fails, it gets voted down in the house, and
then magically, 55 people change their vote. From No, we're not
going for tarp to yes, we're all in favor of TARP. How'd that
happen? Some people say, including Joseph Stiglitz, well,
there was an auction hell, and people were bribed. I call BS on
that. I think that the gun was put to people's heads. Moreover,
if you watch capitalism, A Love Story by Michael Moore, that
movie's not that good, but I'll tell you something, it's worth
its weight in gold because it's got two interviews in there, one
of Marcy Kaptur, who was there at the time of TARP. She voted
no both times. And Elijah Cummings, from Maryland, he
voted no once, and then he voted yes. Michael Moore interviews
him. He never. Michael Moore never mentions the fact that
Elijah Cummings switches his no vote to Yes, but he did. But
Cummings did that. And when Cummings is interviewed, he
said, you know, Michael Moore says, Hey, what's up? You know?
Why did you know what's what's going on in this country? And
Elijah Cummings just says, there's some dark, dark forces
in this country. These people are up to no good. And Marcy
Kaptur herself said that bailout reversed from no to yes. That
was, that was run from the highest levels, like an
intelligence operation, like the military operation. So if I'm
sniffing around Jeffrey Epstein, I'm sniffing around those 55 no
votes that got flipped, because I'm telling you, they weren't
just bought off. Some of them were coerced off, no doubt about
that.
WW: Well, as I recall, there's at least one former congressman
that said that Henry Paulson threatened martial law if the
bailout wasn't passed,
JT: yeah, that was Brad Sherman. He was reciting,
WW: I think Cynthia McKinney also corroborated that account.
Yeah, yeah, that's true,
JT: yeah, you're right. He did that was, that was Hank Paulson.
There was a lot of lies going on in that time, but Marsh. Law
tanks in the street was one of them. There was a lot of,
there's a lot of the sky is falling going on. I mean, I
MG: think this, you know, that leads to a lot of questions of,
sort of, okay, well, that's sort of the who and the and the how.
But, you know, what's the why? You know, why would we do this?
You know, why would a top down, you know, Operation basically be
to, you know, to kill a bank or an investment firm, you know,
what? What sort of effects does that have on the monetary
supply, on the ability for the government to finance its
budget, you know? And then, how do interest rates play into all
this? Because that's an interesting thing. I think about
the pandemic in 2020, is that a lot of these killer whale
accounts are all being created at zero interest rate. You know,
moment, a zerp environment where, you know, maybe it would
make slightly more sense outside of the obvious insurance issues
to keep, you know, billions of dollars in a bank, because you
can't really earn this, this rate anywhere else, but by the
time this, you know, regional bank, you know, crisis sort of
happened. You know, the Fed is raising rates faster than ever
in the history of the United States, even faster than
Volcker's. You know, double digit raise, right? You know,
after the severance of the, you know, the Nixon shock,
basically, in the 80s. So, so, why? So, why would we do this,
you know, and I say we obviously very liberally here. Why would
the United States as an intelligence military operation
want to create these huge debt bubbles and pop them and then
bail them out, basically, with, with with taxpayer money or the
creation of new reserves? Is there some sort of economic
advantage to doing this? Is this is just an inflation play where
we need to basically inflate away our debts? Do you have any
any insight there as to why? You know we would, we would do this?
Why would we? I'll take
JT: because there's a few questions in there. Let me start
with the one I can't answer. I don't understand it this day.
Why do you take out Silicon Valley Bank and first republic
and a couple others? I don't know. I mean a roll up as one
example is one answer. You consolidate the banks and make
them even bigger. Now that's one of the that's one of the after
effects of the financial crisis, is those big banks which held
the gun to the government's head and said, Give us $700 billion
we'll blow your brains out. Those banks are now bigger. They
have even more leverage. Now let me explain something. The reason
those banks have that leverage is that the what I said, it's
the commercial banking supply, money supply that if you have a
bank, let's just take JP Morgan Chase. It's got now it's
ballpark $2 trillion in deposits that that's $2 trillion of
money. If you erase that from the system, you can, you have a
problem on your hands. You You have a lot of people who aren't
going to have money. You're you can. You can now measure in
hours, the amount of time it's going to take for cities in your
country to start burning down. And that's the leverage those
banks had in 2008 you give us $700 million 100 million
dollars, would burn your cities down because you can't afford to
lose us. We have all that money, and people don't understand
that, and they've gotten even bigger. And for sure, Silicon
Valley Bank and others going down could have been part of a
process of rolling, you know, big banks in the even bigger
banks and that that that is one potential answer, but I don't
find that answer altogether satisfying, and it may be the
jury is still out on that. Why does it make sense, though? To
what you the question is, have the debt get bigger and bigger
and bigger like it is, and then pop the bubble and all that
that's been done for hundreds of years. That's just what banks do
is because money in in the Westerns, really throughout the
world now, because money is created as dead in the form of
loans, the money supply is at interest, and you don't have,
you never have enough money to pay off the debt, and so you
leave the control over the money supply in the hands of private
banks. And private banks have done this for years. I mean,
they create bubbles, and then they pop the bubble. The Great
Depression is probably the foremost example. They pop that
bubble, but they know what they're doing. They know in
advance this is going to happen. They short the companies that
are going to go down, and then when the bubble pops, they buy
the assets for pennies in the dollar. That's an that's an old,
ancient formula. Okay, to me, though, the better question is,
why is what's going on now? Going on and what's going on now
is, you alluded to it earlier, is the interest payment on the
US debt is becoming massive. It's north of a trillion dollars
now the the interest payment on the US debt is bigger than the
military expenditures in the US so what? So what is going on?
Because everybody knows that once, once your interest payment
exceeds your income, it's bought. Game. I don't care if
you issue the money or not. If your interest payment is bigger
than the amount of income you have, you're done. You're
mathematically, you're gone. So why is this going on? And I
think the answer to me is, and I'm working on a series now on,
this is the US is being forced into a crisis situation, whether
that crisis takes the form of a fiscal slash, monetary crisis,
due to massive interest payments and due to the fact that we
create money out of we create money as debt, or due to, say, a
World War The US is being forced into a situation where radical
changes are going to be offered as a solution. And I think one
of the things you're seeing now is you're seeing attacks from
all quarters on the US Constitution, and that's of
grave concern to me, because I know what they're after. The
fact is that despite all the Fed sins, okay, it's one of the most
transparent central banks, and it's actually the most
transparent central bank in the world, and the transparency is
due to the Constitution. It's a byproduct of the US
Constitution, because the Fed is a creature of Congress. How did
the Fed come into existence? It came into existence from the
majority of the House and the majority of the Senate voted it
in 2000 in 1913 and the signature of Woodrow Wilson went
on the ACT. It was created by a simple majority in both houses.
The Fed can be dispensed and dispatched and eliminated just
as easily. Majority of the house, majority Senate,
Secretary, President, and it is gone. The Fed is a creature of
Congress. It's a creature of elected representatives. And for
that reason, that constitutional reason, there is transparency
into the Fed. I mean, name another central bank in the
world that's lost FOIA lawsuits repeatedly in the federal
courts, I can't think of any. And so we have a great degree of
transparency into the Fed. Now, don't, don't go, get me wrong,
it's not like, you know, the fact I would not call the Fed
Mr. Sunshine either. But there's more transparency into the Fed
than there isn't, to say, the EC, the European Central Bank,
where the Jesus over there, it's illegal for for legislatures and
for people Members of Parliament to even offer input to the
central bank. I mean, it's an it's a fortress over there. They
have no transparency. They have window dressing transparency.
You know, the ECB issues these reports and puts on these dogs
dogging pony shows. But they don't have to do that. They just
do it because they don't want to look bad compared to the Fed.
Okay, so the Fed is the most transparent bank in the world
due to the US Constitution, and that, to my way of thinking, is
what the powers that be need out of their way. They need a new
regime where, you know, force branch or government to enable
the Fed to have true independence. They have the
Fed's independence now means independence of the executive
branch. That's what independence of a federal agency means
legally in the US. That's not good enough. They need
independence from the government, independence from
nation, independence from Congress. I think that's what
they're after. And I think these crises are all headed in the
same direction, in the direction of emergency, in the direction
of emergency powers to to be declared, to suspend the
Constitution for the very reasons I just gave you. Yeah,
WW: I mean, it's definitely clear there's a wide ranging
attack on on the Constitution, all of those things and and, you
know, the, you know, financial angle that I think is important.
And as it relates to what may have been the motive for Silicon
Valley Bank in particular, you know, Mark and I have been
working a lot on an investigation that involves
Peter Thiel, pretty significantly. And Peter Thiel
for a very long time, in addition to being a long time
CIA contractor, his you know, mission, arguably, for much of
the past few decades has been about privately issued money and
changing how money is issued. And also he was involved back
when PayPal was first created, and sort of wanting PayPal to be
a broker of, like a new global currency and all of that stuff.
So it may be related to sort of some of these discussions that
have come to the fore with the push to digitalize money, and
the potential of how that would play out if the two tier system
is maintained in that sort of all digital future, and instead
of just of, you know, banks being able to create money out
of thin air, what about people that are able to produce, for
example, a stable coin, or something like tether, for
example, the biggest dollar stable coin, as you know, able
to essentially create, you know, billions of tethers, you know,
with really little transparency.
JT: Yeah, that's, um, that is really, that's that. That's
excellent and interesting speculation. I had never thought
of that because, let me back up in the US, the issuance of money
at the highest level is done by the 12 Regional Federal Reserve
Banks. So the Bank of New York, Bank of San Francisco, Federal
Reserve Bank of Richmond, and so on and so forth. They're, those
banks are private, okay? They're they're, well, that's well known
to be private, but they're part of the Federal Reserve System,
which is which is public. So there's some degree of
transparency into, say, the New York Fed. There's cases like
Bloomberg versus Pittman, and I'm sorry, uh, Pittman versus or
Bloomberg versus the Federal Reserve, and Fox News versus
Federal Reserve, where there's some measure of transparency,
even into the private Federal Reserve Banks. Now contrast that
with the transparency that's available into somebody like
Peter Thiel or Palantir, it's pretty much next to zero, and
that's what federal the central banks have a long history of
saying what we really want is windowless walls into our
system. We don't want any sunshine in here at all. And I
think Whitney, when you're speculating that the private
creation we already have, the private creation of money in
this country, big time. Go look at the federal reserve balance
sheet. Last time I checked their seven, seven and seven and a
half trillion dollars of it created by private entities. But
there's some measure of transparency due to the US
Constitution. However you you get, you start getting involved
companies like Oracle and Palantir and, you know, Bezos,
all these guys, they all got CIA connections, don't they?
WW: Pretty much no, but Peter
MG: thiel's a libertarian. John, I'm pretty sure you can be a CIA
and contractor an FBI informant and run your Roth the IRA to be
a billion dollars and be a libertarian. I'm pretty sure.
JT: Yeah, you're right, you're right. I feel I'm totally
satisfied now. Yeah, that so, but you're right. I mean,
that's, that's speculation on Whitney spark, that the private
issuance of money that that rings true to me, because
they're doing it with no transparency there. There is no
FOIA that applies to Amazon, or that applies to balance here,
any of those others is there? They're private entities. You
can't get, you can get into their SEC filings, but they
don't, they don't really tell you that much,
MG: right? And maybe there's a little more transparency if
they're a publicly traded company, as some of these are.
But a lot of this, right, you know? And I think that this is
where I sort of, you know, this is where I sort of start to call
CBDCs, at least when it comes to the US dollar system as sort of
a red herring of census, where, where, I actually think, you
know, the US government really doesn't want to deal with the
hassle of having a retail facing digital currency, and they want
to keep this private, public relationship with private
entities, as we've kind of seen, you know, Whitney, I think,
really broke the bubble for a lot of people with, you know, a
lot of her reporting on on some of these, like, you know,
private companies that really aren't private companies, you
know, like a Facebook or something coming, kind of coming
out of, you know, these CIA projects or DARPA projects. You
know, Oracle, as you mentioned before, is another great example
came out of the CIA as Project Oracle. You know, that that's
really what, and now it's running the biggest database in
the world, you know, Fancy that. That's, you know, kind of makes
a lot of sense, but, but this idea of, well, let's do it in
the private sector, because we actually, you know, we can hide
a lot more in the private sector. We can restrict customer
access in the private sector, whereas what you just said, you
know, the Fed actually, you know, can't do a lot of that
stuff as much as they've, you know, really, you know, waged,
you know, financial terrorism, of course, across the world, in
a lot of ways, with their interest rate manipulation and
yada yada. You know, they're actually decently decentralized.
You know, 12 nodes is actually pretty good for, you know,
versus a Wells Fargo dollar or something like that. So I guess
I am curious, you know, in this, this sort of framework, you
know, how do you look at the cbdc play? Do you see it being,
you know, not to lead the witness here, but do you see it
being more as like a reserve token, sort of the
digitalization of the reserves moving around? Is that sort of
what fed now is sort of this interbank settlement network,
not a retail facing thing. Do you see it still staying in the
in the banks, private entities having these available
programmable money? Or do you actually see sort of a retail
facing government issued currency coming out anytime
soon?
JT: The feds. Let me back up. The thing that makes me curious
about cbdc and makes me think you are right, that's a red
herring. I don't think it's a total red herring, but there's
problems with it. The thing that kind of makes me scratch my head
is it was four years ago. This month that August and Carson's
got up and follow the IMF the Augustins. Carsons is the
general manager of the Bank for International Settlements, which
is the Central bank of Central banks based in Basel,
Switzerland, that there that that truly is a fortress. You're
not getting anything, any information out of that bank
that they don't want you to have. But Carson's gets up in
October of 2020, and says, you know, the great thing about $100
bill, the great thing about cbdc is, compared to $100 bill or
1000 peso note, is, you know, those, those cash, we don't know
what people are doing with the cash. You know, they could be
spending on whatever they want. But with cbdc, we have absolute
and total control to enforce the rules and the technology to
enforce the rules, he loses his mind, but that was four years
ago where he's touting the control mechanism that is cbdc.
Four years a long time. And are we really any closer to getting
a cbdc? What people forget is in that same conference from the
IMF in october 2020, Jerome Powell was on that conference
call too, and he said, Well, you know, sounds great Carsons, but
you know, we've, we got a constitution in the US, and
we've got, we've got to take into account a lot of things.
And he said in another conference, we need enabling
legislation from Congress. Again, we get back to that
transparency, you know, monster that, from the Fed's point of
view, they don't want that transparency, but they gotta
have it to get just to get the caught between the rock and the
hard place. They want the cbdc, but to do it, they gotta lay a
congressional record that everybody can look at in a
bright light a day. So they're stuck between a rock and a hard
place. In the meantime, you have all these private forms of, kind
of pseudo money growing up from the very people who are now on
board with, you know, Bitcoin and digital money, right? And so
I wondered whether it's going to come out. I think that you're,
they're going to definitely introduce it the way it'll come
out, is there? I you know, look, let's be let's be blunt.
Everybody knows there's a crisis coming, and when it happens,
there could be a lot of people pushed to the edge. And I think
at that time, because these systems, like fed now have been
prototyped, you're going to see some form of universal basic
income and digital money coming out from the wholesale level,
from the Fed, whether it's called cbdc or called something
else, I think you'll see it introduced then as a way to dip
their toe into that water and get the project going and kind
of do what they've done with the financial crisis. You know, the
financial crisis kind of crushed its way upward. It started with
the bottom rungs of society in terms of wealth and money, and
it's steadily turned its way upward. And I think you'll see
the same thing with cbdc. It'll be rolled out as a measure
that's sold. They're already doing. It is sold as a means for
inclusion that we're helping people who are, they're so poor
they don't even have a bank account. That's how they kind of
try to sell it. That same
WW: selling point of like, banking the unbanked and all
that is actually pretty prominent for for dollar stable
coins, yeah. And what's interesting, too, in terms of of
getting around what you referred to with, you know, Carson's
fantasizing about total control, and Powell being like, well, we
have this problem in the US called the Constitution. I think
you know, the kind of approach that they're planning to take is
very similar to how they got around the constitutional
protections that would have prevented warrantless spying on
Americans after 911 where they pitched all of these public
sector spy programs and there was outrage, and so they
basically privatize those like, that's where, you know, Facebook
came out of, and Palantir also. And essentially, you know, those
private entities are accumulating the data and then,
and then selling it or sharing it, you know, with the
intelligence agencies and the government. And so, you know,
let's take $1 stable coin like tether can collect, collect that
kind of data that would afford, you know, if it's a Carson's
hands, for example, total control, right? But it to the
public, it looks like it's a it's separated from that, you
know, public sector from the public sector. But in reality,
you know, tether has been very open that they have formally
onboarded the FBI and the Secret Service to its platform are
willing to freeze anything that the Treasury wants them to. So
they'll seize and and freeze people's assets and money and
wallets whenever the US government comes calling. But it
enjoys this sort of reputation abroad, particularly in the
Global South, that it's not the US government, and it's a way to
bank the unbanked, for people that don't have access to
dollars in their home country, or they have rapidly inflating
local currencies, like in Argentina, and it's really
becoming a very covid, a rather covert way to dollar raise the
world, dollarize the world. And really we have, you know, even
people that I know you're familiar with, like our. Our
good friend Larry Summers has essentially been pretty overt
about that, I don't know. So it seems like they're kind of
repeating that same play that was very successful with the
with the whole US warrantless spy apparatus, sort of becoming
a public private partnership. It seems like a lot of these
digital dollars that already exist are looking to do that as
well, and looking for this new what's likely to be some sort of
regulation and stable Coin World next year, hoping to, you know,
sort of be the king of the castle of these digital dollars
that seem like they're going to be, sort of the retail facing
cbdc equivalent of the US. And actually, Trump, when he spoke
earlier this year at the Bitcoin Conference was very much
embraced that, that vision, I guess you could say that he was
going to bring in stable coins, and notably the co chair of his
transition team, Howard lutnic of Cantor, Fitzgerald. He's like
a major, I guess, Baron, you could say, of US government in
the treasury market. He's also one of the main custodians of of
treasuries, because there's a direct relationship with tether
in the treasury market. So it seems like this is kind of where
it's it's shaping up. Well,
MG: that's where they need to go, right? They need to sell
treasuries, right? I mean, that's sort of what you know all
this is about, is financing that debt you talked about, you know,
so eloquently earlier, about how you know now that we've passed
that, that that fulcrum point of, you know, our interest
payments are now worth more than the GDP, the growth of the
country. Our interest payments are now worth more than what we
pay to upkeep. You know, the the US military, you know, we're a
zombie company you would never invest in the United States
right now. You take us out back and Old Yeller us, but they have
to make the Treasury market, you know, sexy again. And I think,
you know, one of the fastest growing
JT: No, they actually, they don't really, they've already,
they've already, yeah, they've already. Got a plan for that.
Don't worry about that. What you know the plan is, and again, you
got to read fed papers. I mean, I pretty sure I've stumbled upon
the plan, which is the Fed is going to buy the treasuries
itself. Right now, under current law, fed couldn't do that. They
changed the law, right? I mean, there's papers on that saying,
hey, wouldn't this be a great idea. The Fed could buy the
treasuries in that way, all those interest payments would
No, I'm not, I'm not kidding. Wow, wow, there will the federal
does buy the Treasury, the newly issued treasuries, and because
the Fed, by law, has a turnover, its profit to the US government,
those interest payments just can be recycled back to the
government. Because Because the law requires the Fed to turn
over 90% of its profit back to the US government. All those
interest payments you got to make on the debt, they're going
to go to the Fed and then pass back through to the US
government. So didn't they read that? Is that a great plan?
That's everything's hunky dory. Don't worry about that at all.
MG: I trust the plan. John, I think that sounds great. Yeah,
that's very fascinating. I'm curious. Then, you know, talking
about this, this idea of, you know, maybe inflating away the
dead and the Treasury market. I'm curious. You know, recently
I've kind of gotten into some Twitter tips with some bitcoin
economists about, kind of, the idea of the petrodollar system,
the idea of, you know, creating artificial demand for dollars,
maybe this concept of the Euro dollar market, creating more
liabilities for dollars. Then when there's a crunch, you know,
that those liabilities increase demand by flowing back into, you
know, legitimate dollar assets. Do you Do you think that any of
that is sort of economically sound, this idea of, you know,
spurring artificial demand for dollars, you know, kind of
inflating through this de facto monopoly and on oil in a post
Bretton Woods scenario. Or is it just purely, you know, the US
Treasury is the most liquid market in the world. The US
Dollar is just the best money. Do you see this sort of being a
political, military play or just simply Gresham's Law, best money
winning? Well,
JT: I don't they're not mutually exclusive. There's a bit of both
going on. I mean, right now, US, US dollar denominated debt in
the world, or US denominated US dollar denominated financial
assets account for something like 60% of all financial assets
in the world, and a lot of that is due to the Treasury. It's
considered the most it is the most liquid financial instrument
in the world, because a lot of people overseas are like, I
don't want to keep it the money in my currency. I'll convert it
to treasuries and get an interest rate. I mean, Alan
Greenspan testified in early 2000s he says, You can't retire
the debt because so many people are holding debt overseas and
but they you can't pay them enough to part with their
precious treasuries. You. He said that. So that's a big part
of it, but another part of it is what you said along the lines of
the petro dollar. I found out doing money at markets with Kat
Austin, Austin Fitz this week, as we were getting ready for the
show that Iraqi oil has the revenue they get from that is
deposited directly in to the New York Federal Reserve account. I
like, well, I didn't know about that. How did that happen? Well,
it happened as a result of the next executive order. I think it
was an article in the cradle or the intercept one of those.
There was an executive order signed by Bush in 2003 and
signed by every presidential administration every year since
that time that says, Yeah, we have to take care of the Iraqi
country that we destroyed, and our way of taking care of them
is to take care of ourselves. And you're depositing that money
into the New York Fed. Yeah. So the New York Fed and the central
bankers will do everything in their power, and then some to
extend their control over the system. And the petro dollar,
for sure, is a big part of that. Yeah,
MG: interesting bringing up that. I mean, I what it was in
2000 they Iraq came out and said they were going to start selling
oil and euros and then money.
WW: And was like, Look what you guys, other oil producing
nations, could
MG: do. And then, and then what happened? I kind of forget what
happened. The next couple of years, someone knocked on the
door and enrolled in, yeah, yeah, that's the
JT: central bank warfare model is, you know what? When you
ginning up a lot of debt is a really good thing, and war is a
really good thing, because not only do you get to gin up a lot
of debt, you get to go overseas and take other people's assets
too. It's not wonderful. And at the same time, because you got
to make that interesting, why don't we introduce a whole bunch
of things called taxes? Yeah, this has been going on since
1694 when the Bank of England. I was started by a pirate named
William Paterson.
WW: But it's just such a, I don't know, useful historical
JT: changed, yeah. Patterson says, yeah. This is a great
system. This is Patterson the pirate says, in 1693, this is a
great system, because we could, we get to gin up IOUs out of
thin air and get interest on our own, IOUs.
WW: I mean, I hate laughing about it, because it's so
criminal and terrible, but it's just like the criminality is so
blatant, and now at this point in time when, like, the
criminals are running all the regulatory agencies and like
everything in public sector world and private sector world.
I mean, it's just, you know, gotten to the point where it's
just so beyond brazen, I guess. But it's like, Pac Man, I guess
I'm kind of reassured to now it always started off with
criminals, and not just like, became that way, like, it's kind
of nice to know, in a weird way, that a pirate began it, you
know,
JT: right? No, no. There was no accident about any of this. This
was baked into the cake hundreds of years ago.
MG: It is really interesting too, especially looking at, you
know, the get again again. We've, I think we've established
pretty, pretty nicely here, that money and capital creation is,
is kind of innately this private, public partnership. But
then you look at like the Trump administration specifically
coming in. We know, we talked about teal earlier, you know,
he's kind of the, the main advisor of the transition team,
kind of the first go around. And maybe I'm, you know, it's that's
useful for my thesis, or our thesis for saying that. But you
know, one of the critical you know people that you know
really, really shaped the Trump administration. Mnuchin comes
in. He recommends Powell, you know, they, they change all of
these things, you know, Mnuchin is a former one West guy,
WW: also former Goldman Sachs, like Henry Paulson, who we
mentioned earlier, and
MG: Bannon. Steve Bannon, under, Yep, yeah. Bobby Rubin, you
know, you start to see, you know, you know, really, this,
this, you know, corruption, really just kind of brazenly of
the regulators, jumping back and forth, whether they're at, you
know, they're leading the Treasury one day, then the next
minute, they're, you know, the head of Citigroup, you know, in
Rubens case, or whatever. So, so, you know, the, I think the
big thing that a lot of people you know, kind of, you know, as
we're getting ready for election season, Insanity, and it's
really, you know, kind of popping off here, there's this,
there's this amnesia, for whatever reason, of Trump's role
in the in the fiscal stimulus, in the lockdowns, in pandemic,
in The in the bringing in of these private sector goals to
basically rewrite, you know, the private, public relationship of
capital creation. Why do you why do you think all of these crises
keep happening right over election years? Why is it that,
oh, eight is during this transfer of Bush Obama? You
know, why? Is, why is covid pandemic happening? You know, is
it sort of this obfuscation of blame? Is it just a complete
coincidence? Obviously, that's a big question, but I
JT: know it's not a coincidence. I had never thought about that,
but that's a great point. Is, why do these things top out and
get to a flash point, not not just an election year, but in,
you know, presidential election years. And my best answer, based
on OA, because I know the OA crisis pretty well, is that
that's when you can make deals. Obama himself, in my, from my
point of view, was a deal. He, you know, he's there, he was
there, and the people in his administration were there as
part of a deal. Well, what's
WW: interesting about Obama is that he's very tied up with this
family from Chicago called the crowns. And one of the top
people at JP, Morgan, yes, was one of the crowns, like James
crown, I think in that particular family played a big
rise in Obama's time at Chicago. And then, of course, it turns
out, once Obama was like, Oh, I'm getting in, his entire
cabinet was pretty much chosen by by Citigroup, including the
treasury secretary. So it seems like there was definitely some
sort of deal made. Well,
JT: the Treasury Secretary, Tim Geithner, you know, just to
remind you, was, he'd been the New York Fed President, and Tim
Geithner ran that administration. He was the top
dog in that administration. Obama, at best, was number two
and
MG: and I believe summers, that was Geithner show, right? And
Summers was also an advisor to Obama's group who was, you know,
critical, critical in the deregulation of the derivatives
market, which kind of, you know, arguably led to 2008 and and
extremely critical in the, you know, repeal of Glass Steagall,
you know, we talked earlier about the regional bank being
crisis, being this misnomer, because none of them are
regional banks anymore. Well, why are they not regional banks
anymore? Because they got rid of the laws that said banks had to
be within, you know, in other states, you know, they dissolve
Glass Steagall. So, you know, we saw this, you know, again, I
think the deal making thing is, is really fascinating, that's a
great answer to a very complicated question. I would
say, so as we're, as we're gearing up here, Howie Latinx
chairing Trump's transition team, you know, as we're getting
ready for this, you know, again, arguably, you know, simulated
crisis, that that is controlled demolition these have all been
controlled demolitions. You could argue, you know, What?
What? What should our listeners here be preparing themselves
for? You know, what's what? What do you recommend folks to do as
we're kind of going into this, this deal making gestation
period, that is, you know, the every four year cycle here, what
would you recommend people do? I
JT: tell people to invest in themselves, invest in things
that can't be taken away from you, in your own knowledge,
because the rest of it could be taken away when there's no rule
of law. The bets all bets are off. They can come and get it. I
mean, there's been no rule of law in this country for a long
time, since 2012 when the Justice Department comes out and
it's flat out, says some banks are above the law. Can't
prosecute them, too big to jail. So with no rule of law, that
means there's no rule of law means there's laws preventing
theft of your assets, the confiscation of your property,
that's all out the window. So divesting things that can't be
taken from you with your knowledge. Number one, the other
thing is, at the same time, you should leave partisan politics
at the door, because it's not going to do you any good. It's
not going to inform your understanding of anything. The
more time you spend on partisan politics and using that to
inform your view of how the money system work, that's time
wasted those partisan politics are going to lead you into a
parking lot in Alaska when it comes to trying to understand
how the system works, you need to let that go at the same time
you do that, though, you got to keep the pressure on these
politicians, because they will respond to public pressure. They
will respond the outrage. There was a point in the wake of the
global financial crisis, after the tarp passed, people were so
angry about tarpassing and so angry at the bailout that the
calls against it, the calls against the bailout and all that
ran over 100 to one. This is born out in congressional
testimony. 101 is a massive amount, and that is why the Fed
buckled again and again and again to Congress, because
Congress had angry people behind them, and it scared the Fed to
death. That's what they don't want. So keep the pressure on.
MG: Yeah, beautiful. It's interesting too. Also, you know,
specifically we talked about Obama kind of being. A
reactionary or a deal. But, I mean, the, I think a lot of
that, that discord, you know, that was sort of my, you know, I
was 18 years old, you know, but that was sort of my awakening.
Was kind of the beginning of like Occupy Wall Street, and
seeing the way that that was completely co opted into being,
you know, now we go, oh, it's everything's great. Guys, hope
and change. Here comes Obama. He's going to drop more bombs
than Bush and print more money, but, and Citibank running his
thing, but, but hey, but he got a Nobel Peace Prize. Well, we
got it, but he got a Nobel Peace Prize. Henry Kissinger, though
it doesn't really mean anything, right? Yeah, yeah. I'd rather
not have a Nobel Peace Prize at this point. But, like, there was
this unbelievable co option, you know, through these, like, very,
very interesting, you know, media plate, you know, kind of
dialectics. And I think we're seeing that again, you know,
there's this whole counter narrative of people coming up
that have now just, you know, they literally became famous
being, you know, covid dissonance. And rightfully so,
to many degrees. And now they're saying the only solution we have
to Biden's inflation, and, you know, the border crisis, or
whatever, is Trump. And so they're presenting, again, this,
this false dichotomy, you know, immediately, yeah,
WW: because, I mean, it's fair to say, right, as as you pointed
out, John with with going direct, you know, that was a
Blackrock brokered plan, essentially, about the next
downturn, and now we're facing the next next downturn. And we
had the Trump administration, Mnuchin specifically, and
Powell, you know, implement a Blackrock plan, and then the
Biden administration's econ team for the past four years has been
run by Blackrock people. And I believe Kamala is top advisor on
her campaign, is one of those same Blackrock guys from the
Biden administration and now facing the next, next downturn.
You know, it seems kind of likely that you know either way,
Blackrock is going to get called back into have some other sort
of scheme as it relates to how you know, the US government
should respond. But there seems to be either like intentional
amnesia or just like no interest in really covering that this is
like a bipartisan theft, and I think it's really interesting
when you look at, oh, wait, how angry people were using covid 19
as cover for what happened with going direct has, you know, been
really successful, because people on the left can't call it
out, right? Because so many of them, you know, fell for a lot
of the major aspects of covid policy that were based on flimsy
or no evidence, right? And then people on the right, you know,
can't really talk about the complicity of Trump without sort
of undermining a lot of the campaign points that they like
to promote, like him being anti establishment or or whatever.
So,
JT: um, no, those, those are, those are great points. Those
are did. In other words, the cover of partisan politics is
not to be underestimated for the schemes that could be run under
them, right? So that's why I say, the faster you ditch
partisan politics and try to get down to the root of what's going
on, that's that's the that's where you want to spend your
time and effort, barking at television. And I know a lot of
people do that. It's like you're just going to get old, you're
going to die in front of your TV barking. That's how you're gonna
die. Stop doing it.
MG: Yeah, it's really interesting. I've been reading
this book that's The Best Way to Rob a Bank Is to Own One that's
sort of talking about the SNL. It's incredible, talking about
the SNL crisis. And they talk about how, you know, Reagan is
pushing this, you know, this whole concept of deregulation,
freeing the markets, and how this is the you know, this is
the way. And at the same time, telling their regulators, do not
let this crisis be known, this crisis that doesn't exist, that
we're saying doesn't exist in the savings and loan crisis.
Please don't, you know, say that it was deregulation that led to
it, and please don't tell anyone that it happened, because it
would be this big about face of our partisan politics that we
ran on, you know, this deregulation push, and now we're
here, and we have this huge, you know, the basically, the the
insurance, you know, group that you know was responsible for
backing, you know, the savings and loans are like $150 billion
you know, insolvent. But we can't say that. I think that
there's a really interesting parallel to the Reagan
economics, this deregulation, to the Trump era. And I think the
biggest sort of, you know, Trump, of course, is a master of
of misdirection and of rhetoric. And he comes out and he says,
you know, in in during his administration, you know that
Bitcoin is, is, you know, kind of, it's phooey, it's, it's BS,
the dollars, that is the king. That's what I care about. And,
you know, Bitcoin is a bunch of hot. Air. Digital assets are a
bunch of hot air, but, but what is he actually doing again? He's
having Mnuchin come in. Mnuchin brings in the Brian Brooks, who
is a former VP and executive at Coinbase, the biggest Bitcoin
exchange in the United States. He brings them in as as the
acting, you know, the head of the OCC basically the biggest,
you know, I guess, kind of head, head litigator, basically, or
for, for the financial markets, and he sets policies. That's
JT: the oldest banking regular in the US. I didn't know that,
yes, and
MG: so, so he's a former one West he worked with Mnuchin, and
he comes in, and he basically puts out a bulletin that says
banks can hold crypto assets, and specifically stable coins.
So he comes in and does this all while Trump is, you know,
tweeting out, you know, things misdirection, and then they're
bringing in and establishing, you know, direct bulletins that
allow banks to hold these things. Now we're seeing, you
know, Trump's former money manager, think putting out this
Blackrock ETF, which is the fastest growing ETF in history.
WW: There's a Trump family now getting into dollar stable coins
with the Trump family. Yeah, again,
MG: that's another interesting thing. You know Trump, you know,
two months away from the election, he comes out and
announces, you could ignore the cryptocurrency aspect of it, but
he's issuing his own currency. You know. Back to this
conversation, this teal, this tealian conversation of private
capital creation. You know, How insane is that, that the leading
candidate, you know, two months before an election, is
announcing that he's issuing his own private currency. So we're
in this, we're in this strange, you know, Twilight Zone, but
basically the Blackrock ETF is now onshoring Bitcoin to an
extreme degree, a 22 billion worth while the leading
candidate who kind of set up all of this stuff in his previous
administration is coming out saying they're going to pay for
the $35 trillion debt using Bitcoin, using crypto, And
they're going to dollarize the world using stable coins, using
these private bank digital cars. He
JT: doesn't understand debt. Anybody who says that doesn't
understand what he's thought. He doesn't know what he's talking
about. Well, don't understand
MG: Ben, yeah. Well, he's also a huge misdirection guys. So
perhaps misdirection, but explain. What do you mean by not
understanding debt? In this sense,
JT: what do you use to pay off debt? The only thing that could
pay off debt unless the unless the creditor agrees otherwise,
is money. Right? You can't pay off debt with Bitcoin unless the
creditor agrees. Why would they agree?
MG: Right? Well, I guess perhaps the only other way that they
could do it is maybe sort of like a new, basically petro
dollar system, where they they basically create artificial
demand for treasuries and for dollars by doing some sort of in
and out monopoly on the on the on and off ramps for Bitcoin
using stable coins or something like that. But you're right in
the sense of, you know, of course, they could never you
can't pay dollar denominated debt in something other than
dollars unless, yeah, you agree to it, ridiculous,
JT: yeah, without concern. I mean, but that, that gets back
to Whitney's point of the private capital creation.
Because if you look at it, there's really not that much
money in the system. The money in our system in terms of just
what, what legally, is money in the US. It's, it's Federal
Reserve notes, and it's coins. That's it, right? Okay? Other
than that, when banks create money out of thin air, when they
credit your deposit account with $1,000 that $1,000 in your
Deposit Account, that's not really money. Legally, that.
That's why you're an unsecured creditor of the bank, because
it's not money, right? If there's money, you'd have it in
your hands. You'd own it, and you know, there wouldn't be a
Counterparty, but you don't own it, which is why you need
insurance on it in case the bank fails and the money goes Bye,
bye. Real Money doesn't do that. So the bank credit money isn't
isn't truly money. It's credit, and it created a thin air. And
so it's like, well, as long as you're going down that road and
letting private parties create quote, unquote money out of thin
air, why not take it out a level to non banks and let them do it
too? Right? So I think that there's a lot of merit to your
thinking along the lines of this whole system is tending toward
more and more privatization of parties creating money and
unregulated parties creating, quote, unquote money. We've
gotten away from money, right? You know, that's why you need
the regulation to begin with, is that they've given a sovereign
you know, the right to coin money is right in Article One of
the constitutions. Congress has the right to coin money and
regulate the value thereof. Um, but right there, it's a
sovereign privilege, and everybody's known as the
sovereign privilege, back to predating Aristotle, right? But
as long as you let private banks do that, well, then you got to
regulate them, because you've handed over a site, you've
delegated out, you farmed out a sovereign right? And now you got
to keep your eye on them. But if it gets more and more farmed out
and far. Of a way, you've got a bigger and bigger problem,
because you have no more opacity, less transparency built
into that system. That's a that's a real problem. I thought
about that too. You guys raised it. Yeah,
MG: it's interesting. You know, we're kind of finishing up this
investigative series, and one of the last things we're focusing
on is Facebook's Libra project, which is kind of this weird
Metaverse Plaza Accord where, you know, initially they wanted
to do this basket of currency that had the dollar in it, which
obviously would have just sort of rapidly dollarized, you know.
And the interesting thing about it is, you know, Bitcoin had
been around for about a decade. You know, in 2018 2019 when, you
know, Facebook came up with this idea, and the US government
didn't really care about Bitcoin that much, because it innately,
kind of can't be a payment system that can be used by 3
billion people, 4 billion people, but Facebook has 2.2
billion active users in a month. And so three weeks after
Facebook announces they want to do, you know, hey, we want to
make private currency. You know, they're in front they have to
testify in front of Congress. Now, again, I think a lot of
this is, is the US intelligence state sort of, you know,
pretending to feign, oh no, this is hurting the dollar, when,
obviously, I think it really isn't. But this idea of
payments, and, you know, you know, billion users versus, you
know, you know, what Bitcoin kind of can't do, is very
fascinating. But to your point, I think of the you know, people
are forgetting what money really is, you know that I think brings
into the cbdc play really interestingly, because if a if a
government is creating a directly issued cbdc in your
account, it relies on a settlement mechanism of another
party. It's basically a checking account to be able to actually
settle, you know, a cbdc between parties. It's relying on, on a
trusted, a trusted settlement network, which is not how m m
zero works. That's not how base layer money works. A Treasury
note doesn't rely on that. A bank note, a coin, doesn't rely
on it's a liquid, exchangeable, you know, medium of exchange,
correct, but, but a checkings account, you know, which is, you
go up the chain to m2 or, or however that there's, there's
innately trust in the system. So, do you think that that sort
of is, you know, can a government create m zero in a
digital form? Is that even possible?
JT: I think so. But I wouldn't bet the farm on it, because you
could, in other words, the purest form of money in the
system now is really silver dollar or a quarter, because
there's no counterparty at all. It's just it is what it is. It's
a quarter. It's worth 25 cents. You know, it's legal tender. $1
bill is a little bit different, because it's legal tender, yes,
however, when it's created, because it's issued by the Fed,
not by the Treasury, there's a debt associated with it. So,
yeah, it's money, but it's, it's somewhat impure, and that it
came money, a debt. Debt came attached to it, okay, but in
either case you don't, there's no settlement involved.
Settlement is only involved when you've got an IOU, like a like
bank credit. In other words, your bank account is technically
an IOU from the bank to you. What is it that the bank owes
you? Well, one of two things, either it owes you Federal
Reserve notes if you demand them, or because that's why it's
called a demand deposit account. Or if you transfer, say, $1,000
to another bank, it owes the other bank $1,000 in reserves
for that transfer. But that then that's, that's what gets you
into the note. The issue of settlement is it's an IOU, it's
not really money. And thus, because it's an IOU, you
necessarily have two parties involved. You necessarily have
somewhere in the chain settlement involved. Can a bank?
Can it? Can have currents? Can a government issue directly,
digital money?
Unknown: Um,
JT: yeah, I think it could. But even if you don't need
settlement of that, you still have the issue of custodianship
and record keeping. So I'd have to think that one through. I
don't know the answer to that question off the top my head. I
don't think they will, though, because the debt based monetary
system is such an inherent advantage to the people who get
to issue the quote, unquote money that gives them an
instantaneous advantage over everybody else. I mean, because
if you can issue money, why work to buy somebody else's business?
Just gin the money up out of thin air and buy the business
with your liabilities of your IOU, and put the business on the
asset side of your balance sheet. Easy peasy lemon squeezy.
We're done. That's why it's set to do the advantage of the
people who issue the debt, to have the debt based monetary
system if you're just issuing money. Me, there's no
corresponding asset. You just said, it's just money that's put
out there. Historically, money like greenbacks under Lincoln
were put out there. They're, you know, they're paid into
existence, and they're accepted because they're accepted for the
payment of taxes and duties and fees. That's, that's just how
it's done. But when you issue the money, you know, what are
you getting in return? You're not getting an asset. You're
getting services of soldiers, for example, do you follow me?
Yeah. Whereas a debt based monetary system, the debt is
issued, you know, the money is issued against assets. Now, a
lot of times those assets are simple, IOUs from customers, but
a lot of times there's other commercial paper anyway, I
don't, I don't know. I have a problem. I don't think the
people who run this system are going to be one of abandoned the
debt based monetary system anytime soon and face in favor
of a pure money system, because the pure money system doesn't
offer them any inherent advantages over everybody else.
You gotta remember the people running. You have to remember
that the people running the monetary system, they rely on
and need the advantage of an unfair of a tilted playing
field, and that tilt is provided by the interest that comes with
the issuance of debt based money. That's their inherent
advantage, and I don't see them giving it up anytime soon.
WW: So I wanted to return to a moment for the possibility of
Trump or some other president, or someone attempting to use
Bitcoin to pay off the US government debt. So you know,
Mark and I had sort of speculated that it would be
possible, since, you know, the US government essentially
defines Bitcoin as a commodity, as opposed to other
cryptocurrencies that it defines as securities. And a lot of
these actors we've been talking about over the course of this
podcast have a very well established track record of
manipulating the price of certain commodities. So what
would happen, for example, if at the advent of whatever this
dollar debt crisis will be, and how it will play out, what would
happen if they manipulated the price of Bitcoin to high enough
levels that it would enable them to pay off 35 trillion or
whatever, dollars, since bitcoin is most often priced in dollars.
JT: You've got to you know that $35 trillion is held by
counterparties. You know, there's people overseas, there's
people in the US who hold savings bonds. The Fed holds
some of that money. Banks hold a lot of the treasuries, all of
those counterparties. You know, if you want to pay down $35
trillion a day, you have to have $35 trillion worth dollars worth
of consent to agree to take Bitcoin, and you ain't getting
that anytime soon, and not Moreover, the amount of time
it's going to take to do that, right? Yeah, good luck. Yeah,
MG: very interesting. I think the only way that I kind of see
them doing it, I agree. And I think that's a that's a
phenomenal point. I mean, you know, we, you know, you look at
our biggest editors or creditors, rather, we see
people, you know, sort of de dollarizing. I think de
dollarization in general is, again, sort of another
misdirectional red herring. I don't in fact, I think we're
rapidly dollarizing. I think the internet is, taking away power
from sovereign central banks and giving people in these countries
in the Global South, if you will, the ability to have access
to dollars. But I think the way that maybe they could do it and
is through sort of capital requirements, and they can
basically manufacture consent by the with these FinTech firms and
say, Hey, you want to hold, hey, Tesla, you want to hold 10,000
Bitcoin on your balance sheet? You know we're going to say that
it's a liability. You need to have an equal amount or even
more dollar denominated assets on your balance sheet. You know,
through capital requirements, whether it's Basel three or or
just, you know, general, the the accounting boards that they use
right now, you know, we can basically force, you know, these
firms that want to hold massive amounts of Bitcoin to also hold
in equal part dollars. And so I think there is a way to sort of
lever that consent and I agree, we're probably not going to get
Japan or China, you know, to take a trillion dollars worth of
bitcoin, but, but there's a chance that we could get say,
you know, a Tesla Palantir, a PayPal, a Facebook, you know,
These groups that have worked with Bitcoin in the past that
are very likely connected, or are connected to the
intelligence state, and most of the Bitcoin is held by people
right located in the US, or like a Blackrock ETF buying, you
know, $22 billion of Bitcoin since January. You know, there
is sort of a setup here where they they could basically.
Manufacture that consent through regulation. Yeah, kind of Yeah.
What do you think about that? Yeah,
JT: they can. They can provide incentives to regulation. But to
be clear, regardless of whether it's a bank or non bank, Bitcoin
would be held on the asset side of the balance sheet, right? I
mean this, that's not who bitcoins on a liability to
anybody except the issuer? But there really is no issuer,
right? It's just out there.
MG: Well, currently the the way that the bulletin works now,
there they they actually got it to Biden's desk very recently to
to change the denomination of Bitcoin from a liability to an
asset, but it actually is technically a liability for US
companies that want to hold Bitcoin. Howie, let Nick again,
tether guy, Chair of Trump's transition team, Cantor
Fitzgerald, one of those 25 you know, authorized, you know,
participants with the New York Fed. So
JT: let me ask you this, if it's liability, why would anybody
hold it? Why would anybody spend money to hold a
MG: liability? Well, they have to hold the equal amount of
dollars, which is super annoying, yes, but I mean,
theoretically they could sell it because it increases in in
value. You know, someone like Howard Howie lunick has said,
JT: the fact that they could sell it, that would make it a
liability, don't it's kind of hard to sell. You know, I tried
to sell my electric bill. Nobody would buy it. Yeah,
MG: great point. Well, I It's, it's, it's sort of an
antiquated, I mean, again, that's why they're sort of
pushing to change this. But it got all the way to Biden's desk,
and Biden vetoed it. So there's bipartisan support for changing
the accounting rules. But you know, the US has a lot to lose
if they allow any sort of private issued money, you know,
to to become money, right? So, so there they would want to keep
it as as a liability. Yeah, I was mentioning Howard just
because he had, you know, basically put out this video
where he was saying, hey, you know, as as the custodian for
tethers treasuries, you know, and as Cantor Fitzgerald, which,
you know, I think at one point, was responsible for like, 70% of
all volume in the treasury market, you know, one of these
25 authorized participants in the with The New York Fed
primary dealer, yeah, excuse me. He came out and said, you know,
hey, banks don't want to touch this stuff because of this
antiquated accounting rules. There was bipartisan support. It
got to Biden's desk. He vetoed it. But for now, we have to
hold, you know, this ridiculous amount of dollars to be able to
hold Bitcoin. So no bank is going to want to touch it. We
need to fix it. So, you know, he's now the chair, you know, by
of Trump's transition team. Obviously, Blackrock is now
moving heavily into Bitcoin. The Kushner's themselves, who you
know, were a huge part of the first, you know, Trump
administration were part of the Libra Association through Thrive
capital. You know, they've, they've, you know, speculated on
creating sort of a US dollar stable coin. There's this kind
of infamous email from Jared to Steve Mnuchin about a Sam Altman
post, who's, you know, another T acolyte, basically describing
the concept of a US dollar stable coin, and how that could
be helpful for for us hedgeman. So there is a lot of kind of
movement here, of, I would say basically the founding of,
essentially a new, you know, Federal Reserve of sorts, being
going into this, the issuance of tokenized dollars. And, you
know, we're seeing PayPal move into the stablecoin game. You
know, we're seeing more and more companies like Blackrock that
are these huge infrastructure pieces of the US economy,
pivoting from going, you know, against Bitcoin, to now being
suddenly for it. Trump is now saying we're going to make
Bitcoin the crypto capital of the world and retain dominance,
which I think is an important piece there. So the retaining of
the dominance, not, let's go get dominance. It's we have, we do
dominate this, this system already. So as as you know,
we've, we've clearly talked about, you know, money is a
private, public thing. Money has also been digitalized for a long
time, but now we're moving in new world where there's private
issuers of crypto assets, of tokenized assets. So how do you
see, you know, basically this, you know, this push of everybody
online, through covid, through pandemic, through shutdowns.
Now, now we're here. The Public Square is now becoming a
monetary network, essentially,
WW: yeah, with wanting to make like x Twitter, half right?
Financial system, as Musk has said, and he's going to be on
some sort of commission under Trump allegedly determine
greater government efficient efficiency, or something, right?
Thanks,
MG: yeah, so, I guess, yeah.
JT: How many? How many can can banks right now hold crypto?
Crypto has assets on their balance sheet.
MG: One Bank. There, there. One Bank got grandfather claused in
the day before Brian books resigned from being the the
Acting Comptroller of the Currency. He gave the the first
charter to a to a crypto Bank, which was anchorage digital,
which is now running the reward system and doing the banking for
PayPal, stable coin. And then also, so that was in 2021, I
believe he left. And so they were the only ones that got that
crypto native charter. And then, actually, literally, I think it
was last week. They they made an exception for the Accounting
Board. I think it's 121 that they allowed BNY Mellon to be
able to custody, which is, you know, like the Bank of banks,
basically to to allow them to custody crypto without having to
have the dollar
JT: custody. Custody is a different question. Custody
means that they keep it in a vault. That's not what I'm
after. What I'm after is, are there's, there's, how many banks
in the US now, 4500
MG: something like, roughly, yeah, okay.
JT: How many of the 4500 banks in the US have crypto on their
balance sheets? Not in not in custody. That's not on the
balance sheet, that's in custody. It's different. How on
your balance sheet?
MG: I think, literally, just Anchorage. And now I think BNY
Mellon is able to, but I don't know if they actually have yet.
So, so yeah, I think you're right. It is this custody play,
not a direct whole Bank of America certainly isn't holding
Bitcoin on their balance sheet yet, because the regulatory
system is not really ready for that yet. They don't want that
switch to happen. They're sort of slowly letting in, you know,
their sort of King made information bank, you know,
Anchorage digital to be, you know, that was sort of, you
know, it's advised by PayPal founders, you know, it's really,
you know, kind of connected to this intelligence state. Now
they're letting BNY Mellon kind of start to do it before they
sort of unleash this, this wave. So I do think they're kind of
doing it selectively. But it will be very interesting to see
when a JP Morgan, which, again, is heavily involved BlackRock
and JP Morgan were doing this, this, this like tokenized
settlement network with privatized versions of Ethereum.
They were playing with these things. So I think we will see
shortly. And I think, you know, I think the Trump administration
will be incredibly important for establishing these rules. And
they kind of already did.
JT: He says, who's the biggest issuer of crypto? Say, in the
US, the
MG: biggest issuer? Well, Bitcoin is obviously the
largest, and it is, you know, quote, unquote, unknown. Let's,
JT: let's, let's leave Bitcoin out, because they're a little
bit different.
MG: So the second largest, you know, Blockchain would be
Ethereum. And the interesting thing about Ethereum is that
it's, it's sort of been perverted by dollar token, and
now there's kind of more, you know, economic weight in the
system of stable coins than there are of actually the the
underlying like ether token. So it's been totally dollarized.
And that's a trend that we're seeing with the majority of the
new private issued blockchains, that they're really just
dollarized, you know, methods for issuing dollars basically.
What does that mean? Dollarized? Dollarized in the sense that,
you know that their main, the main volume on, you know,
because these are just communication settlement
ledgers, right? They're really a blockchain. Is just a ledger.
It's basically just, you know, Microsoft Excel, but everyone
can log in and, you know, make changes, but only, only once.
They can publish new states, but not reverse old states. It's a
mutable ledger. So the ledger is now being used predominantly to
dis volatility of dollar denominated assets between
parties. Does that make sense?
JT: I don't track that. No, I don't understand that. Okay.
Well, what I'm after is who is, let's say that the system went
toward a system where you're trying to you're trying to use
tokens as money because you want to continue this trend toward
privatizing what is ultimately a sovereign privilege. Would,
let's say this is done through the executive branch. Would the
executive branch have total transparency into whoever was
issuing the token?
MG: Well, that's sort of where, you know, we're seeing the
tethers of the world, which, you know, it's $120 billion more,
you know, dollar you know, they're, they're absolutely
having to work with law enforcement, with the Secret
Service, with the FBI. They have huge regular. Oversight, you
know, because they're, they're basically issuing dollars that
theoretically, you know, could be used to tower, you know,
finance terrorism,
JT: yeah, but that's because they've, they've, they're
agreeing to that, right? Well,
MG: because if they want to hold treasuries to tokenize,
innately, they have to have sort of permission from daddy, which
is the US regulatory regime to be able to hold $120 billion
JT: then the answer is, yes, there is transparency. Yes,
yeah, because they need it, right? Yep.
MG: And that's where I think this is all going. It's very
funny. It's like, Oh, wow. The killer use case of blockchain is
is a re creation of the private, public capital creation model.
Great. So glad we did that. It's kind of interesting that that's
sort of where we're going. Well, one thing
WW: I think that's going to be interesting to look out for too,
is a lot of what you and Mark were just discussing. A lot of
it hinges on, like what might happen with regulation going
forward. And I think it's going to be really interesting to see
the timing of that regulation in relation to this upcoming crisis
that's essentially been acknowledged by, you know, major
politicians, like, for example, former Speaker of the House,
Paul Ryan, basically told The Wall Street Journal and I think,
some other prominent outlet, that basically it's assured
within the next, like, three three years, or something like
that. And obviously they have ways of manipulating the time
frame to either make it longer or shorter, and they may do that
depending on what kind of regulation they want to have. So
for example, if they think they could get it passed or certain
regulate the regulation they want passed in a time where
there isn't a crisis, they will do that. But if the regulation
they want would not be passable at any other time during, except
during a major crisis, where rational thought goes out the
window and people are like, What have you done to my money? Or
something like that? I think we could end up seeing a lot of
potential regulations come through that would seem kind of
maybe far out, you know, now, at this point of time, that could
sort of further, you know, the trends that we know this stuff
is going to, you know, go along with things like greater
centralized control for these people, more financial
surveillance for the little people, you know, various other
things that are sort of assured, no matter how they go. But I
think you know the timing of the regulation is going to be really
important, as you know, in terms of how you know crypto or
Bitcoin, and as you know, Trump had theorized, or has claimed,
he might be able to pay off the debt with that. I think you know
it might relate a lot to the sort of legislative measures
that either come before that crisis or like shortly after it
makes itself known. Because when there's, you know, a major
crisis in the guns to people's head. Look, we talked about
earlier in Oh, wait, you can get things passed that you normally
would not get passed in another type of situation that
JT: that is very true. Keep in mind what, what the goal is for
people issuing credit or money is private issuers. What they
want is a system where two things are true. One is they
have total control over the issuance Okay, and total control
over the system on the one hand, and two on the other hand,
there's no transparency and no control of them by you or by
parties even external to themselves. So they want to be
able to sit in a lockbox and with with a remote control and
control everything outside, and have outside not being able to
control anything inside. The whole reason you're talking
about regulation and stuff like that is that the system I'm
describing does not exist now due to laws, due to democratic
principles, due to elections and due to control of people along
those lines. Once they have that lockbox control I'm talking
about, they don't need your consent. Well, what
WW: about a scenario? And I actually got this from from
Catherine Austin Fitz, because of her reporting on the past of
the fastab 56 that accounting rule where basically,
essentially, the government can release like false accounting
statements publicly and keep the real accounting secret. So what
if, for example, they come in and they promise greater
transparency in the next administration? You sort of had
this fielded by RFK JR and some people in the Trump circle, I
suppose, that have been, you know, big supporters of, you
know, spoken at Bitcoin and other crypto conferences and
things like that. So what if they claim to be fully
transparent and are like, here's our ledger of extreme accounting
transparency, but it's the fake public ledger enabled by fab 56
so I think that's another scenario that we could
potentially see the first,
JT: the first question is, with their transparency is, what?
What Rule Do I have to enforce the transparency if you change
your mind about being transparent? And the answer now
is, give the Constitution you. The Money creators are creature
of Congress, and Congress has transparency into them when
Congress wants it or when their constituent wants it, with
somebody who's promising transparency in delivering,
like, what I call window display transparency. The question is,
yeah, but what if you change your mind? How do I how do I get
the information? Can I see you in court? What, you know, what
are we talking about here? That's, that's the question is,
when push comes to shove, how do I get the information out of
you? Answer that, you know, regardless of who the issuer is.
Well,
MG: that's what's really interesting about the, you know,
you look at the the sort of the creation of blockchain as being
a completely open, transparent ledger where, you know, unlike
you know, a private bank dollar, you know, I don't know what
you're doing in your bank account. There's very little way
for me to be able to access that. The Bank sure does, and
maybe they sell that data to certain people, but there's
probably a lot of rules that allow them to restrict their
ability to sell that data. There's, there's sort of a great
perversion of the blockchain as being, you know, the Savior and
this altruistic thing of, you know, the big bad central banks.
And, you know, here, here we go. We get to, you know, take, take
the, take the money back, quite literally, but it's an open
ledger, and so that transparency is, well, the first,
JT: the first question with people saying there's an open
ledger is all right? Well, tell me. Tell me who the top 10
holders of Bitcoin are, and in one amounts, right? And listen
to a pin drop, is, nobody can answer the question, because
there's no transparency, right?
MG: Well, actually, we've done some of that. There is actually
a quite a bit. And one of the largest holders of known, known
holders of Bitcoin is the US government, interestingly
enough. And now Blackrock is up there. And these custodians that
you know, like Coinbase, that's doing all the custody for the
CTS
JT: of the ones you just mentioned, who's the biggest
holder,
MG: I think the biggest now, I think the biggest Bitcoin fund
in the world is the Blackrock ETF, actually. And how much do
they hold? Like, 22 billion All right? And what's the total
outstanding amount of bitcoin? 21 million coins? It's like just
around a trillion dollar asset, I believe. Okay,
JT: so Blackrock holds two tenths of 1%
MG: well, they own, they own 500,000 Bitcoin, something like
that.
JT: Okay, so it's tiny, so you don't know there could be a
whale out there. Who else 100 times watches BlackRock, and you
wouldn't know
MG: it totally, absolutely I, in fact, I pretty much guarantee
you that that's true. There's this big perversion in the space
where they where they talk about, because it's pseudo
anonymous, right? Exactly. So they talk about how, well the
only people that knew about Bitcoin in 2019 to 2012 when the
rate of inflation was, you know, 50 Bitcoin a block. You know,
it's it has this disinflationary monetary policy. Every four
years, it cuts in half. It's issuance. And people always say,
Oh, well, in the first four years of Bitcoin, it was only
libertarians and cypherpunks, yeah, it's only the good guys.
And it's like, no, I guarantee you the second the shit went
live, but the US intelligence state was looking at it. If they
didn't put it out themselves, I think it's actually, really not
that important, who actually came out with Bitcoin, but
rather where it's going. That's that's the more important thing.
JT: Where is it held? Who holds it, right? I mean, look, the
more you guys talk about I mean, because I don't track this
stuff, right, crypto and Bitcoin, I wouldn't touch it
with a 10 foot bowl. But the more you guys talk about it, the
more it sounds like a monster version of gold. Gold is a
financial asset that is used by the powers that be, right? And
has been used by the powers that be for 1000s of years to do
exactly the kinds of things you're saying, which is to
create crises. That's how the Great Depression was created.
Gold gets shipped around all the world. So the name of the game
there with gold and control is the powers that be hold all the
gold, or they hold the vast majority of it. And
MG: God forbid, want to, you want to send a billion dollars
to gold, you need a, you need a, you know, a boat. You need a,
you need all it's, it's very expensive and obvious to trade
you can hold around, right? Yeah, sure. With,
JT: with bit this the Bitcoin issue sounds like the gold
problem on steroids. Yeah. Who holds that stuff? They could
collapse the market overnight with Bitcoin and not have to
ship up the ounce, like you're saying.
MG: Well, now we're having the that's the thing that I think is
so funny about, you know, the community, basically. And I've
kind of sort of retreated from it. I used to be the editor in
chief of Bitcoin magazine. I've kind of retreated from the
community as they're, you know, embracing Larry Finks and the
Trumps of the world. And I'm like, Well, these guys are known
market manipulators. We JP, Morgan BlackRock, these guys
are, they're, they're manipulating metal markets. You
know, they're paying, you know, you know, a little bit of money
to make a lot of money. You know, it's just an expense. You.
In their business. We tried
WW: to tell people, embracing these people was a bad idea. Now
we call the Doomers. Yeah, black pillars, yeah, bitcoins
MG: The only thing that can save them, and we're dissuading them
from buying and it's funny because actually, I'm not. I'm
saying that I think the US government is going to pump the
price of Bitcoin and manipulate the price up. That's not really
dissuading you from buying it. I'm just saying this idea that
it fixes everything and it saves the world is ridiculous. Money
is a tool innately anyway. It can be used to control people as
much as it can free people. It depends how you use it and where
you custody it and all this crap, right? But, but these are
known market manipulators, exactly
JT: the guy, the guy wearing a hockey mask and a flannel shirt
and holding a chainsaw. He's showing up at the party. What
don't you understand about that? Yeah,
WW: okay, but he's gonna pump our bags. Why don't we let him
in? But maybe there'll be some minor carnage. Yeah, we can,
MG: but he's on CNBC saying, Bitcoin good, so I'm gonna let
him in. Yeah, it's, it's, it's, it's, it's pretty wild, the
perversion and the dialectics and just, you know, honestly,
this, this really controlled media. And I think there's a lot
of good people, a lot of good people in a lot of things. I
think there are good people that probably work for the Treasury
Department and the Fed and and at JPMorgan Chase and at
BlackRock, of course. But you know, you look at the mechanisms
and what they actually do to
JT: people, there's a lot of good people in all of those
organizations. I work in an organization like that, yeah,
the top is the problem, right? Exactly. I mean, I've had
interactions with the Fed, and people the Fed have been very
accommodating, and they've gone out of their way to accommodate
me. They're good people those institutions, yeah, but the top
I would, yeah,
WW: no, well, it's probably about time to wrap up here, but
one thing I wanted to bring up here at the very end is related
to a lot of other things we've been talking about. And I don't
want to pick on Trump, but I think it's pretty clear that
he's most likely going to win in November. So I wouldn't,
JT: I wouldn't bet on that. Oh, really. But, well, yeah, I don't
know. Trying to predict these criminals is impossible, fair
enough,
WW: but I think, I think there's a lot to be said about the play
that, like, if Trump, if he gets in, is going to basically, I
think everyone knows if Kamala gets in, like, what they're
going to do, which is the same thing they've been doing over
the past four years, and that their economic team is BlackRock
and whatnot. But there's sort of this anti establishment sheen
that Trump has managed to reestablish over himself. Boy,
has he ever people that saw through that the first time seem
to have, you know, fallen for it this time? Yeah, or develop some
sort of amnesia, you know. So as it relates, you know, to all of
this, I don't know if if kamala's campaign has listed any
potential Treasury Secretary picks. And I know that it was
reported that Trump had been considering Jamie Dimon and
Larry Fink, and then walked those back and said he was not.
But the only person Trump is named as a likely candidate for
him, for for the Treasury is a guy named John Paulson who you
may know, yeah, because he made the biggest windfall in the oh
eight crisis. But he did so by engaging in basically a criminal
conspiracy with Goldman Sachs, the Atticus thing. Well, do you
want to explain that and why? Maybe it's not a good idea to
have someone you know, the most successful criminal of oh eight,
be in charge of the Treasury Department before another major
fiscal crisis, perhaps.
JT: How do you make money? How do you make money on loans you
know are going to go bad? You buy answer is, you buy credit
default swaps and therein. So, in other words, you take out an
insurance policy on an asset that you know is going to go bad
because the debt's not going to be paid. Okay? That's what a
credit default swap is. It's called a credit default swap
because what it really is is third party insurance, which is
a lot disallowed by the law. So they call it called a credit
default swaps. So what Paulson, John Paulson, did, is for
Goldman. He went out and picked out assets. In other words,
debts, mortgages and whatever packages, mortgage backed
securities that he knew were going to be bad, so that Goldman
could then turn around and take out credit default swaps on that
debt, and he put together a package. That's what he did. His
whole thing, was a, was a, was a, was a massive crime, Abacus
and Timberwolf and they and Goldman knew that they were bad
assets. Again, that's congressional tests, but they
WW: didn't tell investors, as I understand it, and Goldman was
prosecuted, but nothing came of it, except a civil trial. But
nothing happened to Paulson, and he took all the money he made
billions. That's
JT: why it's a crime. That's why it's a crime is they knew those
assets were going to fail, and they held them out and sold new
investors and didn't tell them these assets are shitty,
according to our own emails. I mean, that's the word they use.
MG: Well, that's because the rating agencies and the auditors
are, you know, the good people there. You know, they rated them
highly. So, you know, we. Trust. You know the well, it's
irrespective
JT: of the rating. It's even without, even with, there's no
rating at all. That's still a crime, right? You can't, you
can't tell somebody, Hey, this is a great investment, and
conceal material information from the investor that you're
touting the investor to. That is criminal fraud, and that is what
happened. And no one was prosecuted. And Paulson was knee
deep in that he was an enabler of that. That's not who you want
in any you don't want him as his local dog catcher, much less
treasury secretary.
MG: Yeah, it's very interesting looking at these huge scandals.
You know, I just read, you know, big book on Enron, I'm reading
about snls, and it's very interesting how the auditors and
the accounting firms are more than complicit in these you
know, it's not just the CEOs, you know, giving themselves
kickbacks and all this stuff, but, you know, they basically
created a criminal enterprise with regulators, with auditors,
maybe less so regulators, but I think so too. And, yeah, it's,
it's, it's very disturbing that a lot of these folks are, you
know, being floated after, you know, you know, allowing
criminal activity to occur. It's, it's pretty wild, yeah,
but
JT: if you prosecute one of the big guys, just prosecute a
handful of them. Yeah? Once you have a hanging in the public
square, all that goes away, yeah? But it
WW: seems like that's not going to happen. Because, I mean, I
think of regardless of who wins in the election, you're going to
have some insane financial criminal in charge of Treasury,
because now the corruption is just so I don't know brazen. I
don't even know if brazen even covers it anymore. It feels like
a level beyond a brazen at this point. Well,
JT: it's baked into the cake. Now the crime's baked into the
cake. And so the issue is, who, which candidate is going to make
a better deal for the criminals running the show? Yeah, I'm
WW: sure those are the negotiations going on right now.
Yeah. Are
JT: there going? I mean, right now is the time of year, the
time of the election cycle where the presidential transition
teams on both sides are being put into place, yeah? October
elections next month, those transition teams are being
formed today. Yeah,
MG: yeah, it's wheeling and deal in time in
WW: what a fun season we're in. Yeah. Well, anyway, John, it's
been a pleasure having you. Are there any parting thoughts? Any
parting advice you'd like to give to people given a lot of
what we've discussed? Any thoughts about the amnesia and
lack of outrage despite the extreme amount of financial
criminality over the past five years relative to the public
reaction in oh eight I mean, I guess there's a lot of parting
thoughts, but I'll give the floor to you before we formally
wrap up here.
JT: Yeah, turn off your television. Get rid of it. And
never,
WW: I like that
MG: personally, unless you're using that television to watch
the wonderful John Titus best evidence I
JT: want, like a few computer, not the TV, yeah,
MG: yes, yes. Well, hey, it's been an absolute pleasure. Thank
you so much. You know, I really, really enjoy your work. I think
it's incredibly important. This is criminal activity. There's
not enough forensic, you know, sort of looking at this stuff.
We need more of it, and I think you're best in class there. So I
really appreciated the time. Well, I'm
JT: going to deliver soon, and Whitney's going to be part of
it, but that's a story for another day.
WW: Perfect. So with that being said, John and I want to second
what Mark said about your great work and a dearth of forensic
investigations, period. And media today, independent or
otherwise, your voice is very needed. So where can people find
your work?
JT: Best evidence is my YouTube. It's my Odyssey. It's my bit
shoot, and I have a sub stack. Best evidence also great, okay?
And then, of course, I do a weekly podcast with Katherine
Austin fitz@solare.com called money and markets. It's airs
every Thursday night except the last Thursday of the month.
However, that is a subscription service.
WW: It is a subscription service, but as someone who has
a Solari subscription, it is one of the best financial podcasts
around, in my humble opinion. So thank you. Definitely worth
considering the subscription, just for that, in my humble
opinion. Well, it's been a pleasure, John. Thanks so much.
Thanks to you, Mark, and for everyone that tuned in to
listen, hopefully you've learned a lot more about the brazen, you
know, criminals running our financial system, and hopefully,
some of the things discussed here can help arm the people who
have been listening with what to expect over the next few years.
And perhaps, you know, help them prepare however they see fit.
And you know, just like John said earlier, about investing in
yourself, you know, that tends to. The quote, unquote financial
advice that isn't really financial advice that I also
give physical things that will keep you and your family afloat,
whatever that means for you. If things get really crazy, you
know, we're not here to pump our bags or chill anything in
particular to the audience, just, you know, try and take
care of yourselves, given a lot of what we've discussed here,
when things get hairy, it's best to be, you know, prepared in
some capacity. And really one of the best ways to be prepared,
according to people, you know, I've talked that lived through
economic collapses in Argentina, for example, mental preparedness
is very important, so you don't panic when things get strange.
And I think that will hold true for what we can expect over the
next few years as well. So with that being said, thanks again to
everyone. If you listen to this podcast and enjoyed it, please
share it widely. Consider Supporting if you feel so
inclined, we would appreciate it. And yeah, thanks very much,
and we'll catch you all on Our next Episode.
Unknown: You